Chidambaram has kept his macro promises on the fiscal deficit; he has taxed the rich in a token way, but nothing significant. His revenue take of Rs 18,000 crore is not a big blow for the economy, but this means one can’t be sure how good his estimates are. His assumptions will tell us whether his budget outlays are based on reality or just built on hope and hype. We have to wait for the fine print to figure out whether he has delivered a clean budget or one with gaping holes and doubtful arithmetic.Given the huge expectations before the budget, Chidambaram has done nothing to rattle the markets or business. But he has not excited the jholawala crowd either before the elections. It is a “responsible” budget, for the simple reason that he has done little for anybody. Compared to expectations, he has delivered a mouse. But that may be better than promising the moon and not delivering.

From a political standpoint Chidambaram’s budget does all that it can without offending either the ratings agencies and enough to boost markets. He couldn’t promise any new welfare schemes, but ha s endorsed the government’s commitment to existing welfare schemes. He has gone after the easy target of the rich while sparing the middle class voters, something that is certain to help boost the image of the Congress among the middle and lower classes. The budget promised sops to the scheduled castes, tribes and the minorities, again a vote bank that needs to be addressed before state and national elections. It may not be the best budget from an economist’s standpoint but its definitely one that his party will appreciate.Read lessRead more